I don't decry or denigrate Earth Hour. But, in my opinion, this is a more optimistic way of looking at the past and the future, and something worth celebrating. We have the ability to solve the problems - and it shouldn't mean sitting in the dark.
I welcome your thoughts.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
2. There ain’t no such thing as a free lunch.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce “predictable” responses.
and
8. Quantity and quality of available resources impact living standards.
Tuesday, March 31, 2009
Studying the Use of Data
First of all, the germ for this post comes from a discussion with colleague who teaches AP Econ here at Collegiate. Discussions with him are definitely a fringe benefit.
Last night on CNN's Anderson Cooper, one of the top stories was the auto industry. Within the story was an example of how people often use statistics incorrectly to carry their story. I went to the website and pulled it up. The relevant portion begins about 4:30 into the broadcast and ends about two minutes later. After discussing the GM and Chrysler situation, the reporter uses a large map to show the states where over 100,000 people are employed in some aspect of the auto industry (suppliers, production, and sales). He then enlarges the map to include states where over 10,000 people are employed in the auto industry. The reach is significantly farther, as one might expect. I think the take away was supposed to be that if even one of the auto producers goes bankrupt, the jobs will disappear. If I'm right, is that statement disingenuous?
You can show the clip to your students and ask them the same question.
Ask your students these questions before they answer:
1) Are we talking about one company, two companies or all the companies? (Does the opening graphic relate to all companies or specific companies?)
2) Of all the jobs represented by the map, what's the spread of jobs related to each particular company? (Which of the jobs are GM, Chrysler, Ford, Toyota, Honda, Hyundai, etc., or doe we know? Would that change the map if we talked about one company vs. all companies?)
3) What type of bankruptcy are being considered? (Is it a Circuit City liquidation or United Airlines restructuring while continuing operations?)
4) If a company goes under, will the customers of that company stop buying cars altogether?
5) Does the fate of one company automatically doom the entire industry or only that portion tied to that company? (Which may or may not be significant, depending on the company we're focusing on.)
Admittedly, the way the story was told made for better "news". But, I'm not sure we are served well if we are given data that does not support the story well. Stories with better information, more depth and deeper questions might make for a better informed and educated public.
I look forward to your comments.
This post relates to the following Keystone Economic Principles:
3. All choices have consequences.
4. Economic systems influence choices.
and
7. Economic thinking is marginal thinking.
***UPDATE***
There's a marginally more helpful map included as part of a story in today's (Wednesday, 4/1/09) issue of The Wall Street Journal. It shows the location of GM and Chrysler auto production facilities. It adds some clarity, lacks other clarity. For example, while locating the parts plants as well as assembly facilities, it does not include dealerships which were included in the Anderson Cooper piece.
Last night on CNN's Anderson Cooper, one of the top stories was the auto industry. Within the story was an example of how people often use statistics incorrectly to carry their story. I went to the website and pulled it up. The relevant portion begins about 4:30 into the broadcast and ends about two minutes later. After discussing the GM and Chrysler situation, the reporter uses a large map to show the states where over 100,000 people are employed in some aspect of the auto industry (suppliers, production, and sales). He then enlarges the map to include states where over 10,000 people are employed in the auto industry. The reach is significantly farther, as one might expect. I think the take away was supposed to be that if even one of the auto producers goes bankrupt, the jobs will disappear. If I'm right, is that statement disingenuous?
You can show the clip to your students and ask them the same question.
Ask your students these questions before they answer:
1) Are we talking about one company, two companies or all the companies? (Does the opening graphic relate to all companies or specific companies?)
2) Of all the jobs represented by the map, what's the spread of jobs related to each particular company? (Which of the jobs are GM, Chrysler, Ford, Toyota, Honda, Hyundai, etc., or doe we know? Would that change the map if we talked about one company vs. all companies?)
3) What type of bankruptcy are being considered? (Is it a Circuit City liquidation or United Airlines restructuring while continuing operations?)
4) If a company goes under, will the customers of that company stop buying cars altogether?
5) Does the fate of one company automatically doom the entire industry or only that portion tied to that company? (Which may or may not be significant, depending on the company we're focusing on.)
Admittedly, the way the story was told made for better "news". But, I'm not sure we are served well if we are given data that does not support the story well. Stories with better information, more depth and deeper questions might make for a better informed and educated public.
I look forward to your comments.
This post relates to the following Keystone Economic Principles:
3. All choices have consequences.
4. Economic systems influence choices.
and
7. Economic thinking is marginal thinking.
***UPDATE***
There's a marginally more helpful map included as part of a story in today's (Wednesday, 4/1/09) issue of The Wall Street Journal. It shows the location of GM and Chrysler auto production facilities. It adds some clarity, lacks other clarity. For example, while locating the parts plants as well as assembly facilities, it does not include dealerships which were included in the Anderson Cooper piece.
Friday, March 27, 2009
On the Fed and Housing
Today's edition of The Wall Street Journal has what I will call a mini-symposium on the question "Did the Federal Reserve Cause the Housing Bubble?" (Free content at this time.) It's quite good. Its value derives from the wide-ranging opinions offered by a variety of very qualified authors.
None of the individual statements are very long, so they could be distributed in class to small groups and used as a basis for a discussion.
On another somewhat related note, you might soon get to see messages from the Fed at your favorite cinema multiplex.
I welcome your comments.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
2. There ain’t no such thing as a free lunch.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce “predictable” responses.
and
9. Prices are determined by the market forces of supply and demand…and are constantly changing.
None of the individual statements are very long, so they could be distributed in class to small groups and used as a basis for a discussion.
On another somewhat related note, you might soon get to see messages from the Fed at your favorite cinema multiplex.
I welcome your comments.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
2. There ain’t no such thing as a free lunch.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce “predictable” responses.
and
9. Prices are determined by the market forces of supply and demand…and are constantly changing.
Thursday, March 26, 2009
A Student Video on Free Trade
For those of you who are looking for innovative and interesting ways to have your students demonstrate their understanding of economic ideas, take a look at this video (HT to Izzit) put together by some young people on the streets of New York, asking folks about free trade.
If your students are doing something similar, please share with us.
This post relates to the following Keystone Economic Principles:
4. Economic systems influence choices.
6. Do what you do best; trade for the rest.
and
8. Quantity and quality of available resources impact living standards.
If your students are doing something similar, please share with us.
This post relates to the following Keystone Economic Principles:
4. Economic systems influence choices.
6. Do what you do best; trade for the rest.
and
8. Quantity and quality of available resources impact living standards.
Two Views of Change
Major events have a way of changing our world view. The current recession could a have a significant impact on how the people of the U.S. make choices. Much of this will come as a result of our internalized experience. Some of it will come as a result of changes in the institutions (rules and organizations) that develop as a response to what happened.
Given that economic systems are the collection of institutions that are constructed to affect choices; the next question is how will this experience change existing economic systems? Here are two thought-provoking pieces (HT from Arts & Letters Daily).
The first asks how capitalism might change. It's interesting because it is a wide-ranging view. The author recognizes that capitalism is more than a collection of formal rules and organizations. It is a result of choices and actions, usually entered into and created voluntarily. The question of whether capitalism will be our servant instead of our master was particularly interesting. I would submit that capitalism always has been and will continue to be our servant because it is our construct.
The second examines how command systems might change. Of the two, the second is more pessimistic because it predicts that many of the command systems may not survive. That idea is not new. Thomas Friedman discussed the same idea in his book The World is Flat. In that book, he talks about how increased globalization (communication and technology) will make it harder for command economies to keep control. The argument in the second article is somewhat different. Because the people in many countries where command is the dominant characteristic have experienced some improvement because of growth, there may be a backlash if those systems become more repressive. (I should note there are also examples of protest and anger directed at the U.S. in those same countries.)
Regardless, these articles are interesting and may well be worth your time if you like to have your students think about or discuss such ideas in your class. I'd welcome your thoughts on these articles. Do you think they would be useful in your classes?
This post relates to the following Keystone Economic Principle:
4. Economic systems influence choices.
Given that economic systems are the collection of institutions that are constructed to affect choices; the next question is how will this experience change existing economic systems? Here are two thought-provoking pieces (HT from Arts & Letters Daily).
The first asks how capitalism might change. It's interesting because it is a wide-ranging view. The author recognizes that capitalism is more than a collection of formal rules and organizations. It is a result of choices and actions, usually entered into and created voluntarily. The question of whether capitalism will be our servant instead of our master was particularly interesting. I would submit that capitalism always has been and will continue to be our servant because it is our construct.
The second examines how command systems might change. Of the two, the second is more pessimistic because it predicts that many of the command systems may not survive. That idea is not new. Thomas Friedman discussed the same idea in his book The World is Flat. In that book, he talks about how increased globalization (communication and technology) will make it harder for command economies to keep control. The argument in the second article is somewhat different. Because the people in many countries where command is the dominant characteristic have experienced some improvement because of growth, there may be a backlash if those systems become more repressive. (I should note there are also examples of protest and anger directed at the U.S. in those same countries.)
Regardless, these articles are interesting and may well be worth your time if you like to have your students think about or discuss such ideas in your class. I'd welcome your thoughts on these articles. Do you think they would be useful in your classes?
This post relates to the following Keystone Economic Principle:
4. Economic systems influence choices.
Resignation at AIG
The kerfuffle over the AIG bonuses seems to subsiding. But here is a thought-provoking item from yesterday's edition of The New York Times (HT to Greg Mankiw). If you spent any time discussing the ins and outs of the AIG situation, this might make an interesting follow-up. And if you're looking for a question, a good place to start might be "How did the institutions (rules) affect choices of this individual and others in Congress, and others at AIG?" The second could be how might changing the institutions positively/negatively affect future choices of this individual and others affected by the AIG collapse?
I look forward to your thoughts.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce “predictable” responses.
and
7. Economic thinking is marginal thinking.
I look forward to your thoughts.
This post relates to the following Keystone Economic Principles:
1. We all make choices.
3. All choices have consequences.
4. Economic systems influence choices.
5. Incentives produce “predictable” responses.
and
7. Economic thinking is marginal thinking.
Start Your Day with a Chuckle
It's always fun to start the day off with a cartoon that helps explain an economic concept. Today's Non Sequitur offers just such an opportunity.
(I must admit, I'm reminded of the time a criminal (Machine Gun Kelly?) was asked why he robbed banks. His alleged response was "That's where the money is.")
This post relates to the following Keystone Economic Principles:
5. Incentives produce “predictable” responses.
and
9. Prices are determined by the market forces of supply and demand…and are constantly changing.
(I must admit, I'm reminded of the time a criminal (Machine Gun Kelly?) was asked why he robbed banks. His alleged response was "That's where the money is.")
This post relates to the following Keystone Economic Principles:
5. Incentives produce “predictable” responses.
and
9. Prices are determined by the market forces of supply and demand…and are constantly changing.
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